2012 Pennsylvania Consolidated Statutes
Title 17 - CREDIT UNIONS
Chapter 5 - Corporate Powers, Duties and Safeguards
Section 503 - Regulation by department

     § 503.  Regulation by department.
        (a)  General rule.--Credit unions shall be under the
     supervision of the department. The department is hereby
     authorized and empowered to issue general rules and regulations
     and specific orders for the protection of members of credit
     unions, for insuring the conduct of the business of credit
     unions on a safe and sound basis and for the effective
     enforcement of this title. Credit unions shall report to the
     department as often as may be required by it and at least
     annually on forms supplied by the department for that purpose.
     Supplementary reports may be required by the department from
     time to time. Credit unions shall be examined as often as may be
     required by the department and at least annually, and the
     department may use such other methods of assuring itself of the
     condition of the credit unions as it shall deem advisable. The
     cost of all such examinations and inspections shall be paid by
     the credit union. A credit union shall also pay annually its
     proportionate share of the overhead expense of the department
     determined by regulation of the department. The department shall
     give written notice to each credit union of the costs of
     examinations, investigations and the credit union's
     proportionate share of the overhead expenses of the department.
     The credit union shall pay the amount of such costs within 30
     days of the notice. If payment is not made within 30 days of the
     notice, the department may assess a penalty fee of $150 for that
     30-day period and each successive 30-day period of delinquency.
     For failure to file reports when due, unless excused for cause,
     a credit union shall pay to the department $100 for each day of
     its delinquency.
        (a.1)  Fines, removals, prohibition, suspension.--For any
     violation of this title or regulation issued pursuant to this
     title or any final order issued by the department under this
     title or any unsafe or unsound practice or breach of fiduciary
     duty involving a credit union, the department may take any one
     or more of the following actions:
            (1)  The department may impose a civil penalty of up to
        $10,000 for each violation of this title against a credit
        union or any director, officer, committee member, employee,
        volunteer or agent of a credit union.
            (2)  The department may immediately suspend any director,
        officer, committee member, employee, volunteer or agent of a
        credit union from his or her position at a credit union and
        from any further participation in the conduct of the affairs
        of the credit union, if in the opinion of the department the
        credit union or its members have suffered or may suffer any
        significant financial harm or other prejudice. To suspend a
        person pursuant to this paragraph, the department shall
        provide a notice containing a statement of the facts
        constituting grounds for removal and shall indicate a time
        and place for a hearing. The hearing shall be fixed for a
        date between 30 days and 60 days from the date of service of
        notice unless an earlier or later date is set by the
        department at the request of the person.
            (3)  The department may remove any director, officer,
        committee member, employee, volunteer or agent of a credit
        union from his or her position at a credit union and prohibit
        him or her from participating in the conduct of the affairs
        of the credit union in any manner for such time as the
        department deems appropriate.
            (4)  The department may prohibit any director, officer,
        committee member, employee, volunteer or agent of a credit
        union under the jurisdiction of the department from working
        in any capacity in any and all credit unions for such time as
        the department determines to be appropriate.
        (a.2)  Hearings and subpoenas.--
            (1)  The department may conduct administrative hearings
        on any matter pertaining to this title, subject to the
        provisions of 2 Pa.C.S. Chs. 5 Subch. A (relating to practice
        and procedure of Commonwealth agencies) and 7 Subch. A
        (relating to judicial review of Commonwealth agency action).
            (2)  In connection with any examination, investigation or
        administrative hearing, the department may issue subpoenas
        requiring the attendance of or the production of pertinent
        instruments, documents, accounts, books and records by the
        directors, officers, committee members, employees, volunteers
        or agents, respectively, of any credit union. In connection
        with any such examination, investigation or administrative
        hearing, the department may also question any such witness
        under oath or affirmation and examine any such instrument,
        document, accounts, books and records and retain the records
        until the proceedings are concluded.
            (3)  The department may administer oaths and affirmations
        to any person whose testimony is required at any
        administrative hearing or at any other time authorized by
        this title.
            (4)  Any privileges available to Federal financial
        institution regulators under Federal statute, regulation or
        common law shall be available to the department. The service
        of a subpoena upon any employee of the department shall not
        require such person to immediately disclose any information.
        Such person shall have all rights and privileges to object to
        production of information.
            (5)  If any credit union or person fails to comply with
        any subpoena, suspension notice or final order issued under
        this title, then the department may enforce any of the
        foregoing in Commonwealth Court. The Commonwealth Court shall
        enter an order to enforce any such subpoena, suspension
        notice or final order.
        (b)  Suspension of personnel.--(Deleted by amendment).
        (c)  Seizure of credit union.--
            (1)  If the department determines that a credit union is:
                (i)  violating any of the provisions of this title or
            any rule or regulation of the department issued under the
            authority of this title or any order issued by the
            department under the authority of this title that has
            become final;
                (ii)  conducting its business in an unsafe manner;
                (iii)  in an unsafe or unsound condition to transact
            its business;
                (iv)  significantly undercapitalized or critically
            undercapitalized according to the prompt corrective
            action standards of the National Credit Union
            Administration consistent with the Federal Credit Union
            Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.) and related
            regulations; or
                (v)  insolvent;
        the department may, in its discretion, at such time set by
        the department, take possession of the business and property
        of the credit union and retain possession until such time as
        the condition predicating such action is remedied or until
        the affairs of the credit union are finally liquidated.
            (2)  The department shall take possession of a credit
        union by serving a written notice of seizure on the credit
        union's board of directors that contains a statement of the
        facts constituting grounds for seizure of the credit union
        and that contains notice of a hearing and an opportunity to
        be heard. Upon taking possession of a credit union, the
        department may liquidate the credit union, appoint the
        National Credit Union Administration to liquidate the credit
        union pursuant to Federal law or appoint such other agent or
        employee of the department to liquidate the credit union or
        take any other action the department deems appropriate
        regarding the credit union.
            (3)  The department may take similar action if any report
        is not filed within a period of 15 days after it is due.
            (4)  Any person aggrieved by the action of the department
        in taking possession of a credit union may appeal within ten
        days of commencement of the receivership, whereupon the
        matter shall be set down for hearing de novo.
        (d)  Exchange of reports of examination.--
            (1)  Whenever the shares of a credit union are insured by
        the National Credit Union Share Insurance Fund or any other
        share insurance fund approved by the department, the
        department may furnish to the Administrator of the National
        Credit Union Administration or to any other approved insurer
        any reports of examination made by the department under this
        section or any credit union board resolution or enforcement
        document including any order issued by the department
        regarding the particular credit union.
            (2)  The department may furnish to any outside accountant
        or trade organization contracted by the credit union or
        authorized by the department to satisfy the audit
        requirements in this title or meet specifications as defined
        in any order any reports of examination made by the
        department under this section or any credit union board
        resolution or enforcement document including orders issued by
        the department.
            (3)  If a Pennsylvania credit union conducts business in
        another state through the establishment and operation of
        additional branch offices and service facilities under
        section 904 (relating to place of business), the department
        may furnish to the financial regulatory agency of that state
        reports of examination, credit union board resolutions or any
        enforcement document including orders issued by the
        department regarding the particular credit union.
        (e)  Report.--A credit union shall furnish to the department
     copies of the report of financial condition, known as the call
     report, in the same form and with the same frequency that the
     credit union is required to provide the report to the National
     Credit Union Administration.
        (f)  Disclosure of information.--The department may not
     disclose any credit union information in its custody that
     relates to an individual unless that individual consents.
     (Dec. 12, 1994, P.L.1067, No.146, eff. 60 days; Dec. 9, 2002,
     P.L.1572, No.207, eff. 60 days)

        Cross References.  Section 503 is referred to in section 1303
     of this title.